Republicans divided on unemployment insurance politics and policy

People wait to talk to unemployment benefits staff at an Employment Development Department office in San Jose, Calif. (Marcio Jose Sanchez, Associated Press)

The Senate moved the extension of long-term unemployment benefits through with six supporting Republican votes, but conservatives generally are divided on how to approach the issue, which pits sympathy for those who continue to suffer in a lagging economy against the theory that subsidizing unemployment just produces more of it.

In a critical concession, Democrats agreed to proceed on the premise that savings would be found elsewhere to foot the bill, rather than adding to the deficit, according to a Politico report.

“I voted to proceed with the debate over how to address unemployment insurance with the hope that during the debate the Senate will agree to pay for the extension and work to improve the unemployment insurance program so it works better to connect those unemployed with available jobs,” Sen. Rob Portman (R-Ohio) told Politico.

On the House side, The Hill reports that Speaker John Boenher has indicated that he could support a benefits extension, so long as the costs were offset with cuts elsewhere. But other House Republicans are not so sure.

“Despite a dozen extensions, academic research suggests the program has actually hurt, rather than helped, the job creation that the unemployed need most,” Michelle Dimarob, spokeswoman for Ways and Means Chairman Dave Camp (R-Mich.), said in a statement, cited in The Hill. “It is time to focus on policies that will actually lead to real economic opportunities for families who are trying to get back on their feet and back into the workplace.”

As Dimarob notes, paying for the benefits is only part of the conservative critique. The other side of the story is that unemployment is being normalized into a new, permanent entitlement.

This fear was articulated by Fox News contributor Charles Krauthammer this week. "I mean, what we're going to end up with is a European level of unemployment, chronic unemployment subsidized. And the fact is, if you subsidize apples, you get more apples; if you subsidize unemployment, you get more of it. And that's what the economics study shows. It's not that people are lazy. It shows that if you have unemployment insurance, then you can make choices which would allow you to turn down a job that perhaps isn't exactly what you want."

Krauthammer argued that the GOP should accept the three month extension, but on condition that it contain a scale-down of the benefits. Republicans, Krauthammer argued, should say, "We'll accept the short term, the three months, but only if you build into the bill an unwinding of this so it has an end date, so we all understand it isn't an entitlement, it's a way to help people temporarily."

But American Enterprise Institute scholar Michael Strain took to the conservative pages of National Review to argue that extending unemployment benefits may actually keep more people attached to the workforce, arguing that if benefits expire, more people will permanently exit the workforce than will accept compromise jobs.

"We should want to keep the long-term unemployed attached to the labor force until the economy picks up, more jobs become available, and they can find work," Strain wrote. "We should not want today’s long-term unemployed to permanently exit the labor force simply because their UI benefits expire. Why? Because many may end up on government assistance until they reach retirement age. That is worse for them, worse for the economy, and more expensive for the federal government over the long term."

The dispute occurs as new Gallup polling data show the workforce participation rate, or the ratio of adult Americans working, at a two-year low, suggesting that long-term detachment from the workforce has deepened despite an unemployment dip in recent months.